INFRASTRUCTURE deficiencies have played a part in making it harder for struggling regions in Australia to increase their productivity, create jobs and improve incomes, according to a report published by the Australian Local Government Association (ALGA).
The report, 'State of the Regions: Pillars of Growth', prepared for ALGA by National Economics, said that improving infrastructure will enable struggling regions to take advantage of their low housing costs and appealing lifestyle choices to attract people and businesses that will expand their local economic base, link them to the global economy and drive their regional economies.
Dr Peter Brain, leading economist and co-author of the report, said that without draconian tax policies, the only way to prevent absolute and relative increase in income inequality between Australian regions is by increasing the rate of growth of productivity between Australian regions, and especially the lower productive non-metro core regions.
The President of ALGA, Mayor David O'Loughlin, welcomed the timing of the report and said it reinforced the organisation's call to support regional economic development through the targeted infrastructure investments needed to fix freight bottlenecks which play key economic roles on regional national freight routes.
"A Commonwealth investment of $200 million per year for five years would immediately begin to unlock local and regional productivity improvements currently impeded by first and last mile bottlenecks which typically occur on local roads," Cr O'Loughlin said.
"Costings done on ALGA's proposal show that this investment would result in a direct cumulative GDP benefit of $1.72 billion over 3 years and create 4,100 jobs.
"Every year's delay in the adoption of this approach imposes significant costs on the national economy by limiting the growth potential of struggling regions."
Cr O'Loughlin also said that well-located, well-designed and properly-maintained community infrastructure enhances the quality of life and enriches the experience of residents every day, but that a significant proportion of Australia's local community infrastructure is currently at risk of disrepair.
"The 2015 National State of the Assets: Roads and Community Infrastructure Report estimated that 11 per cent - or around $27 billion - of community infrastructure is in poor or very poor condition and in need of replacement, maintenance or upgrades, with some infrastructure being physically unsound or beyond rehabilitation," he said.
"Councils do not have the financial resources to bring this amount of community infrastructure up to a reasonable condition on their own, particularly as they are facing the ongoing challenge of a decades-long backlog and underspend on community infrastructure.
"A partnership with the Commonwealth to co-invest in these essential community facilities would greatly assist local communities to attract and retain key workers, build community and economic capacity, and ensure fairness for all communities."